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In a grand pronouncement Tuesday, Amazon, J.P. Morgan and Berkshire Hathaway said they will take on the behemoth issue of rising healthcare costs.

The well-known titans leading the companies gave precious few details, but their combined market share and technological knowhow are formidable enough that disruption could be on the horizon.

The alliance has “tremendous potential,” according to Maulik Bhagat, managing director in the healthcare practice of global consultancy AArete, which specializes in data-informed performance improvement.

“At 1.1 million employees and growing, they are already a decent sized ‘health plan’ in themselves and could essentially operate as its own payer entity or possibly an ‘Accountable Care Organization’ for their employees,” Bhagat said in an email.

“At a minimum it gives the companies more power to hold existing payer vendors more accountable for health and cost outcomes for their employees. It gives them a chance to deliver better healthcare and reduced costs and change the market dynamics in the commercial healthcare space.”

All three firms also have tens of millions of customers, who could conceivably become among those eventually privy to their new dynamics.

“Expand this to the number of captive and loyal customers these firms collectively touch and you suddenly have the possibility of this becoming a huge disrupting development,” according to Bhagat.

Luring three of the best known corporate chiefs outside healthcare illustrates the scale of the challenge,according to Lyndean Brick, CEO of The Advis Group.

While J.P. Morgan's Jamie Dimon, Berkshire's Warren Buffett and Amazon's Jeff Bezos have similar problems to the broader employer community, “they can afford to go looking” for solutions.

“Merger mania in the healthcare space is indicative of industry wide uncertainty. The various stakeholders will try anything to better the system. Whether it’s CVS and Aetna, Amazon, Berkshire Hathaway and J.P. Morgan Chase, Ascension and Providence St. Joseph, they will use their scale, business savvy and technology, to drive costs out of the system — something CMS has struggled to do on its own.”

The news “proves every business is a healthcare business,” David Vivero, CEO of the digital health startup Amino, told Healthcare Dive. Vivero said the three companies’ unique incentives and influence highlight how pervasive healthcare challenges are to employers.

The healthcare industry isn't holding its breath

While the announcement made waves throughout the business world andhit healthcare stocks, some industry insiders greeted the news with a collective shrug. Amazon does have a history of disruption, and with its new partners plenty of resources, but healthy skepticism is warranted for a few reasons.

There are no details yet

The 400-word press release gave virtually no information about the new standalone company beyond a vague goal of improving employees’ health while keeping down costs and achieving this through technology. That leaves a lot of gaps to be filled, to say the least.

We’ve heard this before

Risingemployer healthcare costs is hardly a new problem. A slew of companies, some high profile, have declared their intention to get more involved, but with little to show for it. It’s possible Amazon, JPM and Berkshire have some new ideas or will finally find a way to make a difference, but without the aforementioned details, it is certainly not an easy assumption.

“We need to go ‘all in’ with a Marshall Plan-type program. Piecemeal tweaking around the edges may just create more distortions and inequities,” said Nancy Fabozzi, transformational health principal analyst with Frost & Sullivan.

The problem Amazon, et al are attempting to solveis mammoth.

Healthcare spending per person is growing at a faster rate than previous years despite use of services staying flat or declining, a recent analysis from the Health Care Cost Institute confirms.

So the challenge is in the cost of care itself more than patient, or any one employee's, behavior.

Rising healthcare costs has been a challenge for politicians and employers for decades. The massive Affordable Care Act made efforts to tame costs system-wide, with uneven success.

Policies and general concepts for reining in costs are out there, but even where there is agreement, what works on paper does not necessarily work in practice. Whatever can be accomplished will need buy-in from providers, payers and patients, all of whom have different priorities.

Looking at retail options

The new company is also likely to look at capitalizing on a growing trend in healthcare — moving to more retail locations. That, of course, is Amazon's sweet spot.

Some of the finalists for Amazon’s HQ2 have notable healthcare ties. Nashville is the site of headquarters for HCA, Community Health Systems (in nearby Franklin) and Ardent Health Services. Dallas is home to Tenet Healthcare, a system with more than 70 hospitals, and major insurer Anthem is headquartered in Indianapolis.

Some of the cities feature top medical research universities, like Harvard in Boston and Johns Hopkins outside Washington D.C. The University of Pittsburgh Medical Center is a large integrated system that has put a focus on tech tools and working with the community as it builds up its workforce.

Walgreens, Rite Aid and, most prominently, CVS Health, have expanded their pharmacy distribution operations and their consumer-facing medical services in recent years. After forgoing tobacco sales in 2014to showcase itshealthcare ambitions, CVS rebranded itself from CVS Caremark Corp. to CVS Health. And it capped off the effort with its purchase last month of health insurer Aetna for $69 billion.

While their merger must still be approved by regulators, Aetna and CVS say they aim to deliver a "personalized healthcare experience" by connecting Aetna's network of providers with consumer access through CVS Health. Technology is a linchpin for them, too. With a broader use of data and analytics, they say, they will create better patient outcomes at lower cost.

The Amazon-Berkshire Hathaway-Chase joint declaration may have thrown water on that. Indeed, the new venture could create "further competitive pressure on CVS, Walgreens and Pharmacy Benefit Managers," considering that they haven't faced such a challenge, according to Moody’s Vice President Mickey Chadha. But at least CVS, while it suffered on Wall Street after Amazon's announcement, is in a position to stay in the game.

“Considering the regulatory burden around every aspect of healthcare, any new entrant in the space is at a huge disadvantage," he said in an email. "In light of today’s announcement, the potential merger of CVS and Aetna is even more compelling, as a more coordinated approach to medical care is necessary to lower the overall healthcare costs for consumers.”

We’ve been here before.

It wasn't so long ago that Walmart tried to leverage its scale to deliver healthcare to Americans.

“Walmart pioneered this with their $4 generic drugs,” Spencer Millerberg, CEO at marketplace analytics firm One Click Retail, said in an email. “But they stopped short by not completely addressing issues the government and private businesses couldn't solve. Where Walmart left off, Amazon is picking up.”

To be fair, Walmart’s effort has been stymied by realities, something that Amazon has yet to confront. In practice, its healthcare delivery was cumbersome and unprofitable, according to John Sarich, vice president of strategy at VUE Software, a firm that specializes in innovating and automating business processes for the insurance industry. Those are two things that are against the retail giant’s core nature. “Walmart took a run at being a Medicare Advantage vendor as well as selling Part D (pharmacy),” Sarich said. “What started out as a way to make money ended up with tying people up in explaining plans and benefits with very little revenue coming into Walmart. It was never a moneymaker for Walmart.”

It’s not clear where exactly the new company will go with its intentions, but there are many options for streamlining, said Julius Hobson, healthcare lobbyist with Polsinelli.

“With a lesser incentive for profits, the new company can cut out middle entities, such as pharmacy benefit managers,” he said. “Hospitals could contract directly with the new company. Initially, the company could buy drugs at a greater volume and demand lower prices. Later, it could manufacture generic drugs as a means for reducing costs.”

How Amazon’s cloud could be a linchpin

One of the few details spelled out in the release is an initial focus will be on technology tools to provide employees with quality and cost data. Amazon’s cloud could play a big role in that.

The industry has been grappling with how to integrate health data among disparate actors. Amazon is poised to assist in that department. Amazon Web Services (AWS), the company’s cloud business, is a leader with 62% of the market share and the unit enjoyed a 42% net sales growth in Q3 to $4.5 billion.

AWS combined with Alexa’s brain in the cloud could be the glue to piece together data points. The company has already been exploring tools for healthcare for AWS customers.

"Certainly healthcare is one of many sectors as part of Amazon Web Services that are important customers that we are focusing on and building tools for," Dave Fildes, Amazon’s director of investor relations, said on a Q3 earnings call.

While still speculative, Amazon could leverage its existing technology offerings to engage employees with healthcare purchasing decisions, which could fuel competition in the payer and provider markets with downward pressure on prices.

However, that futuristic vision "seems far out," Vivero said, reminding that consumers only recently were able to buy movie tickets or order an Uber via Alexa.

"I’m not holding my breath for big changes," John Moore, managing partner at Chilmark Research, told Healthcare Dive. Instead, he expects incremental change are more likely over the next three to five years.

A question of who and what medium to move health data around is also yet to be determined. Amazon and EHR company Cerner were reported to be close to a deal in November.

The deal reportedly involves Cerner’s population health management tool HealtheIntent but no announcements have been made to date.

One thing is certain among the uncertainty, the industry is watching.

The announcement "puts the industry on alert," Vaughn Kauffman, US Health Services and New Entrants advisory leader at PwC, told Healthcare Dive.

"Hospitals, clinicians, and health plans will want to closely monitor the new company, especially if it shows any signs to eventually expand efforts beyond the founders' employee base," Rob Lazerow, Managing Director, Research at Advisory Board, told Healthcare Dive in an email. “The sophistication of these companies, their significant financial resources and their ability to disrupt established markets is clear.”

Employers have positive outlook

“My first reaction is that anytime companies with this type of profile are interested in fixing a problem like healthcare costs, it’s good,” Shandon Fowler, healthcare and HR tech consultant with Four8 Insights, said. “It will force others to pay attention.”

Frank Easley, SVP with Aon’s health and benefits division, echoed that sentiment. “We’ve always encouraged companies take an active role” in managing their healthcare, he said.

The ever rising costs of healthcare remains a dominating narrative in the employee benefits space with no real solution. The real question for observers, then, is: What’s next?

This isn't the first time major U.S. employers have tested the increasingly fraught waters of more direct healthcare management. The Health Transformation Alliance boasted partnerships from Coca-Cola, Verizon and American Express.

But Amazon, Berkshire Hathaway and J.P. Morgan have name recognition, most notably Amazon for its reputation as a disruptor, Fowler said. To most observers, it’s no surprise that big-name employers are now loudly demanding a space at the healthcare negotiation table.

“For the past couple of decades, employers haven’t really used their leverage or they used it in a minimal capacity. It’s been up to provider networks and insurers to have that battle,” Fowler said.

For employers, Amazon’s foray into healthcare — whatever it ends up looking like — may be one of the louder shots in their continued effort to corral an unruly healthcare system. Brian Marcotte, CEO of the National Business Group on Health, hopes all three companies can put their business experience to use.

“New entrants with fresh approaches like these may be just the prescription our ailing health care system needs,” Marcotte said. “This industry is ripe for disruption and the collective resources of these three companies, emerging technologies and Amazon’s customer obsession and supply chain savvy gives me optimism that they will pursue a consumer-focused model that will transcend the fragmented, provider-centric delivery system that we have today.”

Benefits sustainability is a perpetual threat hanging over employers’ heads; if costs keep climbing, employers may have to completely reconsider how such benefits are offered, even though they are a key retention tool.

"If employers sit on the sidelines and let it be decided by insurers and providers, they may end up with a system that doesn’t fit their needs so well," Easley said.